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How do parent and subsidiary audits work?

anonymous person's Profile

I am starting in audit soon and I am just wondering the mechanics of an audit in regards to a parent and sub. if a company buys another and they have different auditors, would the auditor of the parent normally take control of the audit of the sub also or would they keep the two auditor system? I was just thinking because maybe the sub feels like they have a better working relationship with the current auditor and they wouldn't want to switch.

Next, in regards to a compliance with the sec, if the parent is public does the subsidiary automatically have to start complying with sox and all the sec rules for public companies in their audits?

And lastly, if a public company parent has a bunch of diversified stuff with subs with HQ's in different places, do the subs do their own sec audits and then report everything to parent who puts everything together and does final reporting? Or does the parent do everything from their HQ?

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